CHICAGO – The state of Illinois sold $1.3 billion in General Obligation Bonds Wednesday, part of Governor Quinn’s $31 billion Illinois Jobs Now! Capital Plan, to fund important capital projects around the state. The bond sale will ensure that work on many major projects continues, creating thousands of jobs and driving our economy forward. About $250 million will go toward redevelopment of the Red Line, Chicago’s oldest Rapid Transit line, which is relied on by 80,000 South Side commuters every day.
The money will also continue to fund road repairs all over the state; new Metra facilities; new schools, much-needed repairs of existing schools and new buildings on state university campuses, among other projects. These projects will pay long-term dividends in shorter commutes and preserving Illinois’ competitive advantage as a transportation hub and center of learning.
While the Quinn Administration secured better than expected rates in a volatile bond market, the General Assembly’s failure to send the governor a comprehensive pension reform bill resulted in $130 million in additional costs today.
“When I took office, my top priority was to enact the first capital construction plan in 10 years,” Governor Quinn said. “Today’s bond sale ensures that the work continues on much-needed improvements to roads, bridges and other infrastructure projects across Illinois. But legislative inertia has a price, and today the price for taxpayers was an extra $130 million. As I’ve warned repeatedly, this is an emergency. That’s why the General Assembly needs to get the job done by July 9 so we can stop the bleeding, prevent future downgrades and jumpstart Illinois’ economy.”
The state received more than $9 billion in bids Wednesday from 145 investors for $1.3 billion in General Obligation bonds. The average interest rate on the bonds was 5.042 percent. Without the downgrades the state has suffered as a result of inaction on its pension shortfall, the rate would have been lower, based on the prices other units of governments that did not suffer similar downgrades earned Wednesday. That difference works out to about $130 million over the 25-year life of the bonds.
Governor Quinn has made pension reform the top priority for the state of Illinois for almost two years. Since he convened a pension working group in January 2012, he has proposed comprehensive solution after solution, worked across the aisle, called special sessions, set deadline after deadline and released study after study on the dire impact of inaction on education and our economy. He has met at length, numerous times, with the leaders and legislators on this issue and fought hard to pass comprehensive pension reform.
Lack of pension reform has already forced $2 billion in education cuts and $3 billion in social service cuts across Illinois.
At Governor Quinn’s suggestion, the General Assembly formed a conference committee one week ago to try to bridge the differences between the House and the Senate on pension reform. The pension squeeze is impacting every part of the state budget, eating up money from schools, health care and social services. Governor Quinn has set a deadline of July 9 for the General Assembly to act on comprehensive pension reform.
Money from the bond sale is also slated to go to land acquisition for the South Suburban Airport; Western Illinois University's Quad City campus; school, university and road and rail projects in Galesburg, Champaign, Bloomington, Rockford, Rock Island, the Shawnee Mass Transit District and the Madison County Mass Transit district in Southern Illinois.